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Although it might be tempting to spend those $200 now, you should consider having your parents put your money to work through a high-yield savings account. Typical savings account will earn you about 4% to 5% in interest per year. So let's say that you invest $200 in a savings account that yields 5%. Well, after your first year, you will have gained $10, for a grand total of $210. Then after another year, that $210 grows to $220.50. Of course, savings account yield rates are variable, meaning that they tend to go up and/or down. If the rates do go up, that' s great for you. If the rates go down, it shouldn't be too big of a problem because the rates are still positive. Of course, gaining about $20.50 in two years with a savings account seems like too much patience, but you can probably add more spare money to your checking account. The bigger your contribution to your savings account, the bigger your returns. So while a $200 investment with a 5% yield savings account might give you +$10 after one year, a $500 investment at the same rate would give you $25 after one year, a $1000 investment at the same rate would give you $50 after one year. So yeah, don't hesitate to keep feeding your savings account with any spare money you have. Even though $200 might not seem like much, you COULD invest in stocks and such, but I think you're much better off with a high yield savings account, as most of the other answerers have suggested. Remember to not only look for competitive rates for savings accounts, but to also read the fine print to see if any companies have hidden fees or restrictions when depositing or withdrawing money. For example, some savings accounts might only allow you to withdraw from your savings account twice a month. I hope you grow your $200 into a very respectable amount in the future. Good luck and happy investing! |
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